Compass Diversified (NYSE: CODI) (“CODI” or the Company”), an owner
of leading middle market businesses, today announced that it has
entered into a definitive agreement to acquire the equity of
PrimaLoft Technologies Holdings, Inc., the parent company of
PrimaLoft, Inc. (“PrimaLoft”), a leading provider of branded,
high-performance synthetic insulation and materials used primarily
in consumer outerwear, and accessories, for an enterprise value of
$530 million (excluding working capital and certain other
adjustments upon closing).
Based in Latham, New York, PrimaLoft was
established in 1983 by Albany International Corporation (NYSE: AIN)
in response to a U.S. Army request to develop a synthetic
insulation for soldiers that replicated the warmth and weight
characteristics of traditional goose down, but also remained warm
when wet. In addition to maintaining high performance in wet
conditions, the portfolio of PrimaLoft® synthetic insulations
offers products that can both mimic natural down aesthetics and
provide the freedom to design garments ranging from stylish puffers
to lightweight performance apparel. PrimaLoft insulations also
offer superior economics to the brand partner and enable better
sustainability characteristics through the use of recycled,
low-carbon inputs.
Today, PrimaLoft serves over 950 active brand
partners, including Patagonia, Nike, Stio, La Sportiva, Polo Ralph
Lauren, Helly Hansen, Marmot, Moncler, and Canada Goose. As a
technology leader with over 90 global patents, along with process
trade secrets, PrimaLoft is revolutionizing synthetic alternatives
to down in the insulated jacket market with technologies like its
patented ThermoPlume® product. ThermoPlume® insulation features
comparable performance to down insulation when dry, superior
performance to down insulation when wet, can be made with 100%
recycled raw materials, and can be seamlessly integrated into the
traditional down manufacturing process.
PrimaLoft has identified the need for businesses
and leaders to not only anticipate the future, but to shape it to
be more sustainable. Its Relentlessly Responsible™ ethos means that
PrimaLoft has been able to create and deliver high-performance
products while reducing impact on the environment. In fact,
PrimaLoft has diverted 614 million plastic bottles from landfills
since 2015, pioneered biodegradable and carbon-negative fiber
polymers, and reduced emissions by up to 70% for its proprietary
line of insulations made with P.U.R.E.™ manufacturing
technology.
“PrimaLoft has all the attributes we look for in
an acquisition and once closed, will add to CODI’s track record of
acquiring industry-leading, innovative businesses with strong
competitive advantages,” said Elias Sabo, CEO of Compass
Diversified. “PrimaLoft is a market leader and possesses
significant intellectual property, operates in a large, growing
addressable market, and has a world class management team led by
Mike Joyce. In addition, PrimaLoft is a high growth and high free
cash flow generating business that operates at the forefront of
sustainability and is fully aligned with CODI’s mission of
conducting our business in a responsible and ethical manner while
delivering superior investment results. We’re excited to support
PrimaLoft’s next phase of growth.”
Mike Joyce, President and CEO of PrimaLoft,
commented: “I am incredibly proud of PrimaLoft’s success with
Victor Capital Partners and am thrilled to be partnering with CODI,
who shares our commitment to building a sustainable future through
innovation. We believe PrimaLoft is well-positioned to continue its
purpose to unleash the full potential of people, products, and
planet, as we address the need for sustainable product innovations
in the apparel industry, and beyond. We have built enduring
partnerships with key customers through our ability to consistently
deliver innovative products that elevate sustainability and
performance, and we look forward to leveraging CODI’s world-class
platform to continue to push the synthetic materials market
forward.”
The acquisition is expected to close in July,
subject to customary closing conditions. William Blair &
Company served as lead financial advisor to PrimaLoft (a portfolio
company of Victor Capital Partners), along with Baird. Jefferies
LLC acted as exclusive financial advisor to Compass
Diversified.
Following the close of the transaction,
PrimaLoft will continue to be led by its current leadership
team.
Additional information on the acquisition will
be available in CODI's current report on Form 8-K that will be
filed with the Securities and Exchange Commission (“SEC”).
Conference Call
Management will host a conference call on
Monday, June 6, 2022 at 5:00 p.m. ET to discuss the transaction.
The dial-in number for callers in the U.S. is 1-(888)-330-3461 and
the dial-in number for international callers is 1-(646)-960-0805.
The Conference ID is 9222443. A live webcast will also be available
on the Company's website at compassdiversified.com. A replay of the
call will be available through June 13, 2022. To access the replay,
please dial 1-(800)-770-2030 in the U.S. and 1-(647)-362-9199
outside the U.S.
About Compass Diversified
Since its founding in 1998, CODI has
consistently executed on its strategy of owning and managing a
diverse set of highly defensible, middle-market businesses across
the niche industrial and branded consumer sectors. The Company
leverages its permanent capital base, long-term disciplined
approach, and actionable expertise to maintain controlling
ownership interests in each of its subsidiaries, maximizing its
ability to impact long-term cash flow generation and value
creation. The Company provides both debt and equity capital for its
subsidiaries, contributing to their financial and operating
flexibility. CODI utilizes the cash flows generated by its
subsidiaries to invest in the long-term growth of the Company and
has consistently generated strong returns through its culture of
transparency, alignment and accountability. For more information,
please visit compassdiversified.com.
About PrimaLoft
PrimaLoft, Inc. is a branded, advanced material
technology company based in Latham, New York, with offices in
Xiamen, China. PrimaLoft is a world leader in the research and
innovative development of high-performance material solutions,
specializing in insulations and fabrics. PrimaLoft® insulation was
originally developed for the U.S. Army as a water-resistant,
synthetic alternative to down. Since 1983, a heritage of proven
& tested technologies has built trust across the textile
industry, with more than 950 global brands using PrimaLoft products
in outdoor, lifestyle, home furnishings, work wear, hunting and
military applications. With its Relentlessly Responsible™ mission,
PrimaLoft strives to balance innovation, performance and
sustainability in the pursuit of a better future. Today, the brand
is recognized as a benchmark for providing unsurpassed comfort in
any condition, while lessening its impact on the environment.
About Victor Capital
PartnersVictor Capital Partners is a leading middle market
private equity firm investing in specialty consumer, industrial
technology, and business services companies. We focus on resilient
industries and mission-driven branded businesses with outsized
growth potential. Our name stands for victory because we help build
companies that are well-positioned to win for their people,
customers, and communities. For more information,
visit victorcapitalpartners.com.
Forward Looking Statements
This press release contains certain
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, including statements
with regard to the expectations related to the future performance
of PrimaLoft and CODI and the anticipated closing of the
transaction. Words such as "believes," "expects," “will,”
“anticipates,” “intends,” “continue,” "projects," “potential,”
“assuming,” and "future" or similar expressions, are intended to
identify forward-looking statements. These forward-looking
statements are subject to the inherent uncertainties in predicting
future results and conditions, some of which are not currently
known to CODI. In addition to factors previously disclosed in
CODI’s reports filed with the SEC, the following factors, among
others, could cause actual results to differ materially from
forward-looking statements: ability to obtain necessary approvals
and meet other closing conditions to the acquisition on the
expected terms and schedule; delay in closing the acquisition;
difficulties and delays in integrating PrimaLoft’s business or
fully realizing cost savings and other benefits; business
disruption following the closing of the transaction; changes in the
economy, financial markets and political environment; risks
associated with possible disruption in CODI’s operations or the
economy generally due to terrorism, natural disasters, social,
civil and political unrest or the COVID-19 pandemic; future changes
in laws or regulations (including the interpretation of these laws
and regulations by regulatory authorities); general considerations
associated with the COVID-19 pandemic and its impact on the markets
in which we operate; and other considerations that may be disclosed
from time to time in CODI’s publicly disseminated documents and
filings. Further information regarding CODI and factors which could
affect the forward-looking statements contained herein can be found
in CODI’s annual reports on Form 10-K, quarterly reports on Form
10-Q and current reports on Form 8-K. Forward-looking statements
speak only as of the date they are made. Except as required by law,
CODI undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
Investor Relations
Compass DiversifiedChris
Gasiewski203.635.8320irinquiry@compassdiversified.com
Gateway GroupCody Slach949.574.3860CODI@gatewayir.com
Media Relations
The IGB GroupLeon Berman212.477.8438lberman@igbir.com
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